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Hanwha Group increases stake in KAI to expand cooperation in future aerospace projects

Published: 17 Mar. 2026, 16:30 Updated: 17 Mar. 2026, 18:55

A Hanwha Aerospace logo is seen in this illustration taken on July 26, 2025. [REUTERS/YONHAP]

Hanwha Group is increasing its stake in Korea Aerospace Industries (KAI) as it looks to strengthen its position in Korea’s aerospace and defense industry.

Hanwha Aerospace acquired 2.67 million common shares in KAI, or a 2.74 percent stake, in October last year and an additional 1.63 million shares, or 1.67 percent, in the first quarter this year, according to Hanwha Aerospace's annual report released on Monday.

Hanwha Systems, another defense affiliate, also disclosed in its business report on Friday that it acquired 566,635 common shares in KAI, or a 0.58 percent stake, for 59.9 billion won ($40 million).

Hanwha Group now holds a combined 4.99 percent stake in KAI, equivalent to about 4.86 million shares. The group disclosed the holdings through business reports, as stakes below 5 percent do not require large shareholder filings.

"The purchases aim to expand cooperation in future aerospace projects based on a mid- to long-term partnership and to strengthen global export competitiveness in defense and aerospace," a Hanwha Aerospace representative said. "We have expanded cooperation across various defense sectors, including efforts to strengthen the KF-21’s export prospects, build overseas footholds, develop long-range air-to-air missiles for domestically produced fighter jets and propose performance upgrades for special operations helicopters. We aim to develop this into a more stable and lasting partnership."

KAI develops aircraft systems such as fighter jets, helicopters and unmanned aerial vehicles as well as satellites, while Hanwha Aerospace focuses on key components such as aircraft engines and space launch vehicles. Hanwha Systems operates avionics, radar and civilian satellite production facilities. Hanwha Systems also completed the Jeju Space Center late last year, which could strengthen cooperation among the three companies.

An Air Force early warning aircraft (E-737), known as a “flying command post,” carries Defense Minister Ahn Gyu-back on Jan. 1 and flies with escort from a group of domestically developed fighter jets including the KF-21. [NEWS1]

KAI was established in 1999 following the Asian financial crisis through the integration of aerospace divisions from Hyundai, Samsung and Daewoo.

Efforts to privatize the company have continued since 2012, with industry interest growing after Daewoo Shipbuilding & Marine Engineering, now Hanwha Ocean, changed hands in 2022.

Hanwha’s recent stake purchases come as the group could expand into a defense company spanning land, sea and air through a KAI acquisition.

Hanwha has shown interest in acquiring KAI since Hanwha took over Samsung Techwin, now Hanwha Aerospace, in 2015. Talk of a potential acquisition resurfaced after Hanwha acquired Daewoo Shipbuilding in 2022.

A Hanwha Aerospace engineer checks a K-239 Chunmoo rocket artillery system during its demonstration at Hanwha Aerospace factory in Changwon, South Gyeongsang on March 16, 2023. [REUTERS/YONHAP]

Hanwha ranked seventh among Korea’s conglomerates last year with total assets of 125.74 trillion won, according to the Fair Trade Commission. If Hanwha acquires KAI, whose assets total 8.13 trillion won, Hanwha’s total assets would approach 134 trillion won, potentially moving it ahead of Posco to sixth place.

However, any sale of KAI will depend on the government’s decision, as the Export-Import Bank of Korea is the largest shareholder with 26.41 percent, followed by the National Pension Service with 8.12 percent.

“As the global space industry shifts toward a private-led ‘New Space’ model, there is a growing need to strengthen the next phase of the space industry using private-sector capabilities,” a Hanwha representative said. “Together with KAI, we aim to build a space infrastructure that covers launch vehicles, satellites and data analysis, from low Earth orbit to larger satellites.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KO SUK-HYUN [[email protected]]